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03/28/2024 05:28 AM
Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20230&cosponId=39692
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Senate of Pennsylvania
Session of 2023 - 2024 Regular Session

MEMORANDUM

Posted: February 3, 2023 02:54 PM
From: Senator Ryan P. Aument
To: All Senate members
Subject: Small Business Bankruptcy Protections
 
In the near future I intend to introduce legislation to modernize Pennsylvania’s exemption statute to provide fair protections for small businesses and encourage entrepreneurship in the Commonwealth.
 
Studies show that when starting a business, many entrepreneurs will choose states where they are not
risking loss of their homes and other property if the business fails.  States can provide this protection through exemption statutes which set forth different categories of property that may not be taken by judgment creditors or by a bankruptcy trustee.  The purpose of this protection is to provide modest support and stability to individuals, families, and business owners so that when they are in a financial crisis, they may retain certain items such as a home, car, or business equipment and still function as part of society and eventually re-enter the economic mainstream.
 
Unfortunately, Pennsylvania’s exemption statutes generally have not been updated since the mid 1800's and rank at the very bottom of most categories for state exemptions.  Further, the Commonwealth’s exemptions lag those of most neighboring states making it unattractive to entrepreneurs and investment.
 
For examples, some states, such as Texas and Florida, offer unlimited homestead protection, meaning there is no cap on how much equity in a home can be protected, while other states like Ohio have a certain dollar amount of protection.  Most notably, Pennsylvania has no homestead exemption but also has no exemptions for tools of trade, business equipment, firearms, or a car.
 
To that end, my legislation would provide a fair, yet measured, system to protect the homes and other assets of hard-working residents when they are faced with a financial crisis.  Please join me providing appropriate protection for our businesses and those who wish to create jobs in our Commonwealth.